effectively measure engagement

Employee Engagement: How to Measure What Matters

Recently, there have been some eye-opening reports about the state of employee engagement, both here in the U.S. and globally. Aon Hewitt, in their 2017 Trends in Global Employee Engagement Study, found that engagement levels have dropped for the first time in five years and Gallup reported in its State of the American Workplace report that a full 70% of U.S. workers are not engaged at work.

But before we all get too breathless about these admittedly disconcerting engagement numbers, it’s important to remember that employee engagement is not an end in and of itself. Engagement numbers do provide a window into the general well-being of your workforce, but more important than the raw numbers is how engagement ties back to desired business outcomes.

Say, Stay, Strive

Aon Hewitt, in an influential 2015 paper advanced the “Stay, Stay, Strive” framework for the variety of desired Employee Engagement outcomes. According to that model, engagement drives a variety of desirable outcomes, including increased employee advocacy and a more desirable employer brand, (“Say”), improved retention and tenure (“Stay”), and better overall performance (“Strive”):

“One manager may have an employee who is incredibly hardworking but needs to say more positive things about the company due to his/her network impact on peers. Another manager may have employees who generally seem positive about the company and committed to staying, but need to ramp up individual effort toward the new performance behaviors required by an organizational transformation.”

So it really isn’t just about the score, it’s about understanding what you need to measure in order to achieve the desired business outcome.

Are You Measuring What Matters?

Do you know how well your engagement programs are working? How about the connection between programs that engage employees, such as employee recognition and rewards, and your desired business results?

Employee engagement has become a cornerstone and calling-card of today’s most successful businesses. But instituting a haphazard or incomplete engagement initiative can often lead to more problems than solutions, as employees dutifully fill out their surveys but nothing ever seems to come of it.

Successful employee engagement programs should tie back to specific organizational goals, help to align employee values with company values, and ultimately — drive improvements in overall performance. Studies have shown that highly engaged employees are:

  • 21% more profitable;
  • 17% more productive, and;
  • Enjoy 20% higher sales than industry peers with average engagement.

Whether your measure for success is better employee retention, improved alignment with company goals, or increased revenue, your journey begins in first knowing what to measure and how to do it well.

An engaged workforce is almost always a profitable workforce. According to Gallup, companies with a well-defined culture of recognition and commitment to employee engagement have been shown to outperform their peers by 147 percent in earnings per share. Learning how to measure engagement – and what to measure – are the first steps towards realizing the engagement advantage. By measuring engagement in a number of ways and against a number of different metrics, companies can then learn what actions they need to take to improve in this important area of differentiation.

What you’ll learn

Having a better understanding of what makes your organization tick can help you find a competitive edge that you didn’t know existed. In our new eBook, “Employee Engagement: Four Places to Start Measuring What Matters,” we provide four ways to effectively measure the results of your engagement programs to ensure success in areas critical to your business – such as employee retention, performance against goals, and alignment with company values. Download the eBook now and begin learning how to measure what matters!

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About the Author

Josh Danson

Josh is Director of Content Marketing at Achievers. An accomplished marketing and communications professional with more than 20 years’ experience in the fields of marketing and PR, Josh worked as a press secretary on Capitol Hill before moving West, and from politics into PR – and on into content marketing. Josh graduated with High Honors in History from Kenyon College and lives in San Francisco with his wife and 9 year-old daughter. In addition to work and family, he is passionate about music, politics and fly fishing (not necessarily in that order).

 

 

 

Measuring Employee Performance

5 Performance Measurement Myths

The question of how to measure employee performance represents one of the last vestiges of old-school HR methodology. Today’s workforce is digitally transformed, highly social and mobile, made up of multiple generations, and collaborating across virtual and global locations. There has been a profound shift in the workforce away from hierarchical, top-down organizations towards teams and collaboration, where having a culture of recognition can drive engagement and results far more effectively than infrequent reviews handed down from on high by management.

We all want the best hires and to lure the top talent. But once on board, they’re part of the organization, and now making sure that they’re fully engaged becomes the challenge. But how do we know if they are working up to their potential? Old-school approaches to performance management, which view a single employee outside of the context of today’s team-based, networked workplace, no longer ring true. Indeed some would argue that many of these approaches were myths to begin with – and I’d have to agree.

Here are five assumptions about measuring employee performance that need to be retired:

Myth #1 – Individuals should be judged solely on their own performance.

The idea that we perform as an island may apply to an isolated few, but it doesn’t fit the majority of workplaces — either today or yesterday. The investment made in working out how to evaluate individuals may be better spent evaluating the quality of their team or business unit’s output. What targets have been hit? What goals have been reached?

Perhaps we should be evaluating employees not only on their performance, but on their level of engagement and on their ability to thrive in team-based environment. Highly engaged employees are more likely to give the kind of discretionary effort that all bosses are looking for, and that have a tangible effect on a company’s bottom line. In fact, Aon Hewitt has reported that for every incremental one-point increase in employee engagement organizations saw a 0.6% increase in sales. For a company with sales of $100 million, this translates to a $6 million windfall! And in companies with the most engaged employees, revenue growth was 2.5 times greater than competitors with lower levels of engagement.

Myth #2 – Good employees just do the job, they don’t need a reason or added meaning.

Is the better employee really the one that doesn’t need to understand how their work aligns with company’s mission and values? Performance stems from engagement. And being engaged stems, in large part, from feeling aligned to — and invested in — the company purpose. Motivation and meaning go hand in hand.

Even if a task is performed well, accomplishing it inside a vacuum is going to create a gap somewhere along the line. Employees deserve to know why they’re there. They’ll participate more fully, and are more likely to push to reach targets and goals if they are invested in the rationale behind the effort.

Myth #3 – An employee that’s good this year will be good next year.

When a team of researchers dove into six years of performance review data from a large U.S. corporation, they found that only a third of high-scoring employees scored as high in subsequent years. And they found no evidence that high-performing employees always perform highly, or that poor performing employees perform poorly. Today’s workforce is continually being met with innovations that require new learning and new skills, so what’s “good” today may not be an accurate measure of what’s desirable tomorrow.

When a company uses trackable learning platforms, they have a means of measuring growth and development. To drive engagement and retention they can extend from onboarding programs, demonstrating a commitment to an employee’s growth from the moment of hire. 84% of employees want to learn, and keep learning. When you align an employee’s learning with the company’s business goals, that’s a win for all.

Myth #4 – Past performance is indicative of future results.

In 2015, a number of Fortune 500 companies announced that they were doing away with old school performance reviews. Accenture, the Gap, Adobe and General Electric all veered away from the annual or quarterly review ritual in favor of building a stronger culture based on continuous feedback and frequent recognition.

What’s happening instead is that many companies are moving to a system where employees and managers can give and receive social feedback and track the history of recognitions given and received. This new approach – measuring the frequency of peer-to-peer, intra-team and team recognitions within a powerful digital and social recognition program – provides better quality insights and has the potential to foster a far more positive, and productive, work culture.

Myth #5 – The best way to measure performance is when no one’s expecting it.

Spot checks, random and unexpected, are still recommended by some HR stalwarts, who assert that it’s a way to motivate employees to give a consistent performance. But it conveys an atmosphere of mistrust that may be more of a de-motivator.

Trust is critical to employee engagement, but it’s still in short supply: a recent survey of nearly 10,000 workers from India to Germany to the U.S. found that only 49% had “a great deal of trust” in those working above and alongside them. Contrast that with study findings showing that organizations are extremely concerned with driving engagement and promoting a workplace culture that is based on transparency and meaningful work. You can’t have both.

That we’re still having this conversation is in part because we may lack the imagination to see our way to a new starting point. But the real drive to perform comes from within.  We are motivated by purpose, and by being appreciated for what we do.

Employees today want to be engaged, we want to know what higher purpose our efforts are contributing to, we want to excel and to grow. Employers should start with that knowledge and measure their employees accordingly.

Make sure to check out the other series of guest blogs from Meghan Biro, starting with her first guest blog post For Recognition To Have An Impact, Make It Strategic.

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About the Author
meghan biroMeghan M. Biro is a globally recognized Talent Management and HR Tech brand strategist, analyst, digital catalyst, author and speaker. As founder and CEO of TalentCulture, she has worked with hundreds of companies, from early-stage ventures to global brands like Microsoft, IBM and Google, helping them recruit and empower stellar talent. Meghan has been a guest on numerous radio shows and online forums, and has been a featured speaker at global conferences. She is a regular contributor at Forbes, Huffington Post, Entrepreneur and several other media outlets. Meghan regularly serves on advisory boards for leading HR and technology brands. Meghan has been voted one of the Top 100 Social Media Power Influencers in 2015 by StatSocial and Forbes, Top 50 Most Valuable Social Media Influencers by General Sentiment, Top 100 on Twitter Business, Leadership, and Tech by Huffington Post, and Top 25 HR Trendsetters by HR Examiner.

 

Marcus Buckingham at ACE 2015

Seismic shift #3: From theoretical models to real-world behaviors

The third of the seismic shifts that will affect human capital, human resources, and the human experience at work is the move from theoretical models to real-world behaviors, according to best-selling author and management expert Marcus Buckingham.

As he explained at Achievers Customer Experience 2015, the seismic shifts will force organizations to zoom in from current broad, depersonalized views to localized, team-based approaches to talent management. Buckingham, who also is the founder and chairman of TMBC, shared that today’s HR development tools are based on models, not people.

One area for change is with competency models. As an employee moves up in a company, the competency model grows to “require” more skills and traits for the job. Buckingham says there is no real data to support competency models, and – very importantly – no one person will have all of the traits, qualities, and competencies in the model. Instead, companies need to get away from models as a way to define positions, people, and promotions and move toward tools for real managers and teams.

For instance, look at this 40-point competency model created by NASA for Systems Engineering leaders. It seems impossible to be able to accurately measure employees based on this overwhelming set of attributes.

NASA Competency Model

Buckingham said that when you study the best teams in an organization, ask the right questions, and compare the answers you get from the best teams to the answers you get from the worst teams, you can see the difference. The questions are in four key areas – Purpose, Excellence, Support, and Future – and are designed to probe how the employee feels about the team and about himself/herself in relation to the organization. Here are some examples:

  1. I am really enthusiastic about the mission of my company.
  2. In my team, I am surrounded by people who share my values.
  3. At work, I clearly understand what is expected of me.
  4. I have a chance to use my strengths every day at work.

The manager – the team lead – is responsible for making employees feel connected to something larger and ensuring they feel they have a stake in it. Organizations must hold team leaders accountable not only for their team’s performance, but also for how team members feel about the organization.

The challenge for today’s enterprise is to move the organization’s view and workforce analytics to the local level while balancing the needs of employees to feel at once unique and a part of something bigger than themselves.

Marcus Buckingham Performance Ratings

Seismic shift #2: From big data to real-time, reliable data

Marcus Buckingham, best-selling author and founder of TMBC, outlined the three seismic shifts in talent management that will take an organization’s focus down to the local level, upset the traditional performance review process, and up-end traditional competency models.  During his keynote at Achievers Customer Experience (ACE) 2015, Buckingham explained that organizations will need to move from big data to real-time, reliable data.

According to him, performance ratings data is typically “garbage” because it is generated only once or twice per year, and it’s based on the fallacy that human beings can be reliable of raters of other human beings. In fact, he says that humans are horribly unreliable and have been recognized as unreliable for years.

Enterprises invest billions in the traditional performance reviews that take place each year. After the reviews are completed, data has to be compiled, reviewed, and analyzed by human resources and then packaged up and sent back to leaders before anyone can get a raise, promotion, or learning development plan (or termination). But these workforce analytics are based on obsolete data. It would be better, as noted in the previous post, to upend the process and make performance reviews an ongoing activity in which managers ask real questions about their employees.

In traditional performance reviews, more than half of the rating is based on the patterns of how the manager rates. For instance, if a manager has given a 4 to two employees in a row, they’ll likely be more inclined to give a 3 or a 5 to the next person in the line. According to the study Understanding the Latent Structure of Job Performance Ratings, “Our results show that a greater proportion of variance in ratings is associated with biases of the rater than with the performance of the ratee.”

Companies have known about – and have been trying to remove – these idiosyncratic rater effects (IRE) for decades. Recently, some companies have decided to stop doing performance reviews altogether. But Buckingham says that reviewing isn’t the problem; it’s the ratings and the IRE that are leading to bad data.

Companies actually need a range of data and a differential between people in order to determine how to pay and promote them. He says companies should be asking: How do we capture good data about our employees?

This takes us back to the team lead. Buckingham says instead of asking the leader to rate his or her employees objectively (which is rarely possible), you should turn the questions around so that the rater is asked to record their own feelings and actions:

  • I always go to Jane when I need extraordinary results. (1-5)
  • I choose to work with Jane as much as I possibly can. (1-5)
  • Would I promote him/her today if I could? (Y/N)
  • Does he/she have a performance problem that I need to address immediately? (Y/N)

Taking those answers and comparing them to data about the team leaders’ intentions for the team, noting how long he/she has worked with each employee, and understanding that each leader has innate rating tendencies (more critical or more ____, for example), creates natural, real performance ranges that can be used to make solid decisions about pay, promotions, and training.

Marcus Buckingham Talent Management

Seismic shift #1: From serving the organization to serving the team leader

The three seismic shifts that will affect human beings, human capital, and human resources, according to Marcus Buckingham, best-selling author and chair and founder of TMBC, will change organizations’ focus down to the local level, upset the traditional performance review process, and up-end traditional competency models.

At Achievers Customer Experience (ACE) 2015, he elaborated on the first of three: the shift from serving the organization to serving the team leader. As he noted, in any given company, with policies, procedures, culture, and environment being equal, the success of teams can still vary wildly. The only difference? The way the team leader manages the team.

Buckingham says that no matter where you work, as the team leader goes, so goes the organization. Despite the fact that every organization knows this, HR tools are made to serve the organization rather than the team. Most HR departments launch initiatives centrally and push them down to the employees. Buckingham suggests shifting the focus to the local level by borrowing the processes of successful teams and pushing those practices back up.

One way to do this is to change the performance review process. Instead of a once-a-year snapshot (that requires managers to rate employees on a scale) that is fed back to the central HR department for compilation, review, and analysis before being cascaded back to the manager, he said the process should be frequent, local, and personalized. He emphasized that HR should never be the first department to get their hands on performance review data and workforce analytics – everything should go to the team leaders first, so that they can act quickly on the findings.

This can be accomplished by moving the focus away from a traditional rating scale to questions that allow the manager to asses less subjective information:

  • What are the strengths of the people on the team – what can each person do?
  • What are the teams doing now – where is the work?
  • How are the team members feeling – right now?

We need to have managers start asking and answering these three questions right now and on a regular basis. By moving the focus from ratings, which Buckingham notes are subject to interpretation by each manager (some managers never give a “3,” for example), to real questions about real people, an organization can truly measure where each team members’ strengths lie and – importantly for engagement – how they feel about their work.

By  serving the  manager rather than the organization and focusing on real-time results and dynamic teams, Buckingham says a company can model success from the bottom up.

Our next post will focus on the 2nd seismic shift: from big data to real-time, reliable data.

Marcus Buckingham at ACE 2015

3 seismic shifts that will reshape organizational behavior

There are three seismic shifts underfoot that will affect human capital, human resources, and the human experience at work.

These shifts will force organizations to zoom in from their broad, depersonalized view and instead take a localized, team-based approach to talent management. According to best-selling author and management expert Marcus Buckingham, organizations need to overhaul the traditional performance review process and upend existing competency models.

Buckingham, who also is the founder and chairman of TMBC, has dedicated his career to exploring and addressing the complex issues of strengths, management, and leadership in the workplace. He described the three following shifts during his keynote at Achievers Customer Experience 2015:

  • From serving the organization to serving the team leader – Today’s workforce tools are made to serve the organization, but no matter where you work, the team leader affects how successful their employees will be. Despite the fact that every organization knows this, HR tools are not built to serve the team leader. Performance management, employee engagement, etc., are built to serve the organization.
  • From big data to real-time, reliable data – Predictive data is ubiquitous in today’s organizations, but no matter how great the algorithm, if you put in bad data, you’ll get bad data in return. In fact, the way most organizations gather performance ratings data results in faulty workforce analytics.
  • From theoretical models to real-world behaviors – Today’s HR development tools are based on models, not people, and measure against a set of competencies and skills that are expanded upon as an employee moves up in an organization. This isn’t realistic for two reasons: a) no one person possesses all of the competencies and skills “required” by any given workforce model; and b) there is no data to support competency models, so organizations should not promote against them.

The challenge for HR and business leaders in making these shifts will be finding and deploying tools – many of which exist already – to take the organization’s view from “we” to “me.”

In the following posts, we will explore how Buckingham says organizations can take the focus from a central to a local approach, and how they can balance the needs of employees to feel at once unique and a part of something bigger than themselves.